adrianc
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Post by adrianc on Jun 22, 2017 18:34:41 GMT
I think you just defined a discretionary protection fund... No the difference is that Lendy covering the losses wouldn't need a separate company that they transfer funds to, wouldn't even exist as far as anyone is concerned. Advertising a discretionary protection fund is different to just doing it to still be able to say that everyone has received the full amount interest expected and made no capital losses.
I just don't like them advertising the PF, happy for them to operate one to keep their advertising slogans I just think that they could confuse the unaware into thinking that their money is somehow protected.
So, basically, your beef is their marketing?
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DiQ
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Post by DiQ on Jun 23, 2017 7:37:37 GMT
So if LY keep the interest from loans waiting on the secondary market then it's in their interest to have the secondary market flooded? That way they make money from other people's investments with no risk to their own capital?
Or have I got the wrong idea here?
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Jun 23, 2017 7:56:36 GMT
So if LY keep the interest from loans waiting on the secondary market then it's in their interest to have the secondary market flooded? That way they make money from other people's investments with no risk to their own capital? Or have I got the wrong idea here? Short term yes, long term no.
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twoheads
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Programming
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Post by twoheads on Jun 23, 2017 8:33:14 GMT
So if LY keep the interest from loans waiting on the secondary market then it's in their interest to have the secondary market flooded? That way they make money from other people's investments with no risk to their own capital? Or have I got the wrong idea here? Short term yes, long term no. Agreed.
When I started with P2P, if Lendy's SM had been flooded as it is now then I wouldn't have invested with them.
So, in my case at least, a fluid SM was one of the attractions. The £8M on the SM shows that there is a lot of stuff people want out of, causing many a potential investor to wonder why they should want to be in.
Short term, Lendy can boost their reserves with the savings on interest payments.
Long term, definitely a bad thing since they desperately need to attract new investors in order to sustain their expansion.
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Post by charliebrown on Jun 24, 2017 2:42:20 GMT
Why wouldn't Lendy be transparent and tell us how much is currently in the provision fund? Why does it need to be hidden?
Once the PF doesn't cover investors' losses and Lendy can no longer claim "no investor has ever lost a penny" do you think they'll just give up bailing out loans altogether? People will never remember the loans Lendy bailed out, they will always remember the loans where investors lost money. So once they break their duck will they just give up on the PF.
I personally think the PF is a good idea for investor confidence, but making it hidden and discretionary raises too many questions. All those investors holding all those loans on the defaults tab must be wondering what help the PF will offer.
i can't see Lendy being able to keep their "no investor has ever lost a penny" claim intact much longer.
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Post by charliebrown on Jun 25, 2017 8:44:53 GMT
Why wouldn't Lendy be transparent and tell us how much is currently in the provision fund? Why does it need to be hidden? There could be several reasons - the popular one is that LY is hiding it because the PF is going to be hard to cover future losses, which could deter investors who (wrongly IMO) rely on it. Also, there are questions about whether or not LY are using this discretionary to cover other losses, such as SBL loans and maybe the Tranches they have been providing away from the platform to prop up loans (PBL081 & DFL002) < I believe that this part has been denied by LY on this forum Another theory (one I tend to agree with) is that the PF is hidden because LY is going to cover all near future losses regardless of what is in the PF, but continuing to claim the PF is covering it (which could be factually correct if LY just keep topping it up) to mask the fact that there is an underlining problem surrounding inadequate security Or, it could just be a PITA to continue to update the PF amount - when it was on the site for everyone to see, it was just a formula that showed 2% of the Live Loans - they can no longer do this, as the PF methodology has changed, and there was a recent loss that used the PF. This is unlikely, as there has been zero indication of what is in the PF since it disappeared. All good points, CD. The lack of transparency is an issue for me. It has been debated on this forum as to whether LY did the right thing by bailing out the Garden Centre, including all accrued interest; there were not many people who predicted that outcome  I think on balance that helped prove the PF does exist and that LY are trying hard to retain investor confidence. As has been said though, it's unsustainable. It's been said that at 12% we all know the risks and should expect losses from time to time. I've even said that to myself. But nothing kills confidence like losing invested capital. I've had 4 loans default on me at Funding Circle and I immediately stopped investing and sold out of all the loans I could (some are stuck in a "troubled" state and can't be sold). When friends ask about P2p I continue to recommend LY and MT but I always say Funding Circle should be avoided. Seasoned investors factor in some loses but not everyone does and might withdraw when loses are incurred. I've forgotten what my point was, but I think there's a point somewhere in there 
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toffeeboy
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Post by toffeeboy on Jun 27, 2017 12:49:17 GMT
No the difference is that Lendy covering the losses wouldn't need a separate company that they transfer funds to, wouldn't even exist as far as anyone is concerned. Advertising a discretionary protection fund is different to just doing it to still be able to say that everyone has received the full amount interest expected and made no capital losses.
I just don't like them advertising the PF, happy for them to operate one to keep their advertising slogans I just think that they could confuse the unaware into thinking that their money is somehow protected.
So, basically, your beef is their marketing? Basically yes and the potential view the uninformed could take from saying there is a protection fund. It is something that I would like to see the FCA clamp down on. Having a discretionary PF is pointless in my view.
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Post by directlender on Jul 2, 2017 21:16:54 GMT
Will someone please explain to me what happens to any interest earned on loans on sm? What do you mean - do you mean what happens to your interest when you have a loan part on the SM? If so; then the simple answer is that you loose the interest earned whilst the loan part is listed - you still get all previous interest at the end of the month. However, this is only if it sells - if you cancel the listing before the end of the month, you will receive all of the interest, if your listing moves into a new month then the previous month's interest (for the period it was listed) will be lost.If you're asking what happens to all the lost interest - that goes straight into LYs pockets have I understood your statement above correctly? e.g. On 1st June, I own a loan part. On 10th June, I list it for sale on SM (interest stops) but cancel the sale on 30 June before the loan part sells. Are you saying that on 1st July, Lendy would pay the interest for the WHOLE month (1st-30th)? I only ask as this is mentioned nowhere on Lendy's site as far as I can tell! Kindly advise. Cheers.
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I think on balance that helped prove the PF does exist and that LY are trying hard to retain investor confidence. As has been said though, it's unsustainable.
